Saturday, June 30, 2007

Pimpri-Chincwad in the fast lane

With the population of the Pimpri-Chinchwad crossing the one million mark, the demand for real estate in both the commercial and residential sector has increased manifold.
Pimpri is witnessing tremendous development in the real estate sectors like never before. “The biggest township in Pimpri-Chinchwad, Empire Estates, is the new, upcoming mega township here, which is raising living standards to never-before heights. It is meticulously planned to create an environment that’s exclusive, spacious and green, with all facilities for comfort and convenience,” says a source from Sukhwani Builders.
Increasing number of malls, multiplexes, hospitals, schools, colleges in the area have added to the city’s desirability quotient. Jai Ganesh Fame multiplex at Akurdi has been a recent development in the entertainment arena. With the multiplex offering a decent ambience and good value for money, residents of the twin cities do not have to travel upto Pune for quality entertainment.
Major real estate developers have been attracted to the area because of its proximity to Pune – just 15 km away - and its developing infrastructure. Rates in the Pimpri-Chinchwad zone are stable now as compared to about 10 months ago. The rates for residential projects range from Rs 2550-2880 per sq. ft depending on the location and the amenities being provided.
Mahindra Gesco has a vast expanse of land in Pimpri and is aiming at developing the land with the best of the contemporary amenities in the near future. Mahindra Royale and The Woods are two of their major projects in the area.
“Mahindra Gesco is primarily aiming at developing residential zones keeping in mind the proximity of amenities and facilities like shopping complexes, malls and multiplexes at the service of its prospective buyers. Also being a reputed giant in the market helps as we don’t have time lags clearing with other legal matters and conveyance laws,” says Milind Patange, Head of Marketing of Mahindra Gesco Developers.
Pimpri-Chinchwad has many tourist attractions and hosts green and peaceful environs for the residents. Some attractive destinations in the twin-cities are Appu Ghar, Bhakti Shakti and Durga Devi Hill park.
In the wake of its increasing population demands there has been a steady increase in the number of primary and higher educational centres. Dr. D.Y. Patil’s educational institution, besides setting benchmarks in the educational arena, has also been a blessing for local residents. Sant Tukaram Nagar in Pimpri has developed post D.Y. Patil era. Many shops and restaurants have developed owing to the percentage of youth. Many people have constructed duplexes and offer the upper storey to the students on a cot basis or as paying guests.
“Renting our rooms to the students has become a secure monthly source of income for us. Besides offering rooms on rent, we also cater to mess facilities,” says Mrs. Salunkhe of Yayati society at Sant Tukaram Nagar.
Pimpri-Chinchwad College of Engineering, D.Y. Patil College of Engineering (Akurdi), Maharashtra Academy of Engineering, ATSS IICMR at Pradhikaran, Lokamanya Tilak Homeopathy college at Chinchwad are a few other institutions in the area.
The close connectivity and easy commuting to and from Pune is also an asset for the residents. Pune and Pimpri-Chinchwad Municipal Corporation are keen and interested in the development and widening of major roads and construction of bridges. The development of Dehu-Katraj bypass, national highway IV, has contributed towards relieving the traffic congestion.
“The old Mumbai-Pune highway has been converted to a four-lane highway with direct connection to the Mumbai-Pune expressway at Somatne Phata,” says Abhijt Sarwade, a resident of Pimpri.
The twin cities are well connected by road and rail. With regular bus services of PMT and PCMT to aid in commuting, railway trains also provide a decent connectivity to Pimpri Chinchwad. Nashik too is just three to four hours’ drive from here.
Government hospitals like Yashwantrao Chawan Memorial and other hospitals like DY Patil and Lokmanya Tilak offer quality medical service at nominal rates. Birla hospital one of the best in the country is providing quality medical facilities at affordable rates. The 500-bed hospital, spread over a sprawling 13-acre land, is located at the heart of Chinchwad.

With major developers Sukhwani, Mahindra Gesco and DSK vying for the real estate market in Pimpri-Chinchwad, their prospective consumers are catered to with an array of options.

Despite maintaining close proximity to Pune; Pimpri-Chinchwad has managed to maintain its distinct identity. Its offer of quality services with good amenities and a tranquil ambience is making Pimpri-Chinchwad a sought after residential location. The twin-cities of Pimpri-Chinchwad have become the preferred choice of the connoisseurs of fine living. The developments at the current pace will surely ensure that Pimpri-Chinchwad will be a coveted zone for developers and consumers alike.

No occupancy verdict in favor or apt-owners- Supreme coutr

The recent Supreme Court verdict on Non-Occupancy Charges (NOC) has put an end to the long-term feud between societies and its members, once and for all. The Apex court upheld the constitutional validity of the notification dated- August 1, 2001, issued by the State government that NOC cannot exceed 10 per cent of the service charges.
Now that the verdict has come out, thousands of flat owners who have let out their flats or who are contemplating renting them out will breathe a sigh of relief with the latest verdict upholding the Mumbai high court order. This verdict will definitely help to curb unwarranted charges levied by bureaucratic societies and release vacant flats in the city for rental purposes. This order will also minimise conflict between flat owners and societies across Maharashtra, which have resulted in litigation.
By virtue of the powers under section 79A of the Maharashtra Cooperative Societies Act, 1960 the State Government issued a NOC circular in 2001, which fixed the ceiling on NOC at 10 per cent of the service charges. However, the government order was challenged recently on 2/3/07, when Mont Blanc CHS at Peddar Road in Mumbai filed a special leave petition (SLP no. 7964, 7965, 7966) and demanded interim relief and autonomous authority to decide upon the non-occupancy charges. This petition was called for hearing on June 19 wherein the Supreme Court upheld the Bombay High court ruling but provided interim relief to petitioners who are entitled to charge 10 % of the monthly rentals and not 10% of the service charges.
The August 2001 notification had clearly spelt out that in case societies have not amended the old byelaw on NOC then they would have to amend and update it. Moreover, even if the amendments are not made societies in the state cannot charge more than 10 per cent of the service charges. Despite this clarification from the government, many societies tend to charge unreasonable non-occupancy charges.
There are more than 58,000 cooperative housing societies in the state, with more than 12,50,000 flats. In Pune, according to a 2002 report of the divisional joint registrar of cooperatives societies, there are 7,711 societies, with 20 per cent of the flats lying vacant.
Earlier, the non-occupancy charges were not regulated and fluctuated according to the whims of societies, who obtained general body resolutions. Many societies charged exorbitantly, making huge profits on this.
Mr. Alwyn D’Souza, Secretary, Alpine Heights, Co-operative Housing Society at Baner argued, “For middle-class societies wherein the maintenance charges are around Rs 500 per month, 10% of it amounts to mere Rs 50, which is unfair, since the sub-tenants also utilise the same amenities as the society members.” Office-bearers of societies also believe that the flat owners charge sub-tenants exorbitant rates and would pay a pittance to the CHS as per the new law.
Advocate D. Vader explained, “The apex court defended its decision and justified its stand that the sub-tenant has no locus standi with the society. The member and the society thereof settle all the matters concerned. The owner pays the maintenance charges for the flat per se and the sub-tenant pays his dues to the owner. So the society recovers services rendered to the occupant, i.e. the sub-tenant. The society should not be concerned with the monthly rentals charged by the flat owner.”
Mr. Lalit Kumar Jain, Chairman, Promoters and Builders Association of Pune (PBAP) and also Chairman of Kumar Builders, points out that it is more important for societies to know who is coming in to stay rather than the monetary aspects. “In fact, by charging more they may be compromising on the quality of the person coming into the premises,” he explains. Also the exorbitant charge does not have any logic. Prior to this, societies were charging exorbitant non-occupancy charges, which ultimately reflected in the high rentals, burdening the end user. This also led to many non-occupied vacant flats not being rented out. This SC ruling will help to curb exorbitant NOC and facilitate the consumer.”
The maintenance charges are funds raised by the society members for maintaining common amenities like elevators, garden and cleaning. The flat owner has to pay both maintenance charges and nonoccupancy charges if he or she rents out the flat, and this amounts to surplus charges for the benefit of the society.
Mr. Rohit Gera, Executive Director of Gera Developments Pvt. Limited, asks, “Why do societies want to put their hands in someone else’s pockets? Why do they want a share in somebody else’s fortune? If the flat owner is making a profit from his own property, why does the society want a share? It is absolutely irrelevant what the owner charges as rent as the services which are being provided are already being paid for in terms of maintenance charges.”
Following the ruling many the nonoccupied vacant flats will be released for licensing and rental, reducing the crunch on rental housing in a city where the demand is constantly on the rise.

CM gets Microsoft to invest in Pune IT park

I hope the CM ensures Pune doesn't go the same way Mumbai has - to the dogs. The good thing is Microsoft is happy with 50 acres. If it was Infosys they would've asked for 500 acres. Microsoft realises its not in the real-estate business. This news is surely going to set the tails wagging in the fledgling Pune real estate market and brokers and builders will jump on it to hype up prices in areas in the vicinity of Hinjewadi.

Mumbai: Maharashtra chief minister Vilasrao Deshmukh’s American holiday got an unexpected sweetener—Microsoft chairman Bill Gates has committed to setting up a state-of-the-art IT park in Pune district’s Hinjewadi, sometimes described as the Silicon Valley of India.
Deshmukh, currently touring the US to market Maharashtra as a ‘first choice destination’, had a long meeting with Gates at the Microsoft offices in Seattle. Deshmukh’s pitch—that his government would apply the new developments in information technology to the welfare of farmers—evidently tugged at Gates’ heart-strings, and purse-strings too.
“Microsoft will set up an IT park in Pune district and will take all possible steps for the welfare of farmers,’’ the philanthropist-techie announced to the highlevel Maharashtra delegation comprising Deshmukh, industries minister Ashok Chavan, chief secretary Johny Joseph, the CM’s secretary U C Sarangi and industries secretary V K Jairath.
“After my meeting with Bill Gates, I am sure relations between Microsoft and my government will be strengthened. I am overwhelmed by the reception given to me,’’ Deshmukh observed in his concluding remarks. The chief minister said that in the next decade, Maharashtra would emerge as one of the best states in terms of basic infrastructure, power, industrial development and roads. “We will be on par with any other developed country,’’ he announced. State expects Gates to invest Rs 300-500cr
Mumbai: Reviewing the performance of his government, chief minister Vilasrao Deshmukh said in Seattle that during the last year, a record number of major industries—49—had been set up in the IT sector in Maharashtra, with a total investment of Rs 5,929 crore and had created an estimated seven lakh jobs.
Details of the Microsoft project are not available but what is known is that the government has offered a 50-acre plot in Hinjewadi and is expecting an investment of between Rs 300 crore to Rs 500 crore. “The fact that Gates has decided to set up an IT park in Maharashtra is significant,’’ said an official. “Along with us, at least a dozen states were knocking at his doors asking for his business.’’
Microsoft currently has 5,000 people working in India. Of these, 1,300 are software developers at the company’s development centre in Hyderabad. Until now, for Microsoft, this has been the only city where so large a number of software developers was posted. Bangalore has a research centre but is much smaller, with only 50 people.
The official said ever since Deshmukh made it known that he had plans to visit the US six months ago, senior bureaucrats had been drafting a strategy to ensure that this would not be just one more foreign tour. “We planned our strategy very carefully and fixed our targets. The decision of Gates to invest in Maharashtra is being viewed as a major success of Deshmukh’s foreign tour,’’ the official said.

Wednesday, June 27, 2007

Apartment registration mandatory

Its time for the speculators to exit the market since the government plans to make apartment registration mandatory at the time of booking. This bitter pill is a bit too late since prices have jumped up 100% and more over the past couple of years. This is an ill-conceived plan and will put the apartment buyer at risk when dealing with small time builders. More often the not, construction is delayed by atleast 6 months to 18 months and many times in times of tight liquidity the apartment is left unfinished. So speculators and end-owners of these properties will be left in a lurch. Nevertheless in cities like Mumbai where prices have reached dizzying levels, there is bound to be a slump since no-one likes to pay 10-20L (10% of 1-2 crore) as registration if they dont plan to stay in it. Lets keep watching as the party unwinds and the drunk's stagger their way home

Financial Express writes
NEW DELHI, JUN 26: It may not be easy to frequently sell property for a hefty premium much longer. With an eye to curb speculation and claim a slice of such transactions, the government plans to make it mandatory for all buyer-seller agreements to be registered. According to industry sources, registration will have to be carried out within a week or two. Since the subject falls under the state list, individual state governments will decide the registration fees.

• Registration will have to be carried out within a week or two
• Individual state governments will decide the registration fees
• Will deal a blow to the speculator market and check inflation

At present, it is mandatory to register an apartment only after one gets possession. That leaves open a window of opportunity for speculators to resell property at a premium during the period between initial payment (the advance) and actually taking physical possession.

Here’s how it works: the cost of an apartment of 2,000 sq ft at Rs 5,000 a sq ft works out to Rs 1 crore. The booking amount of, say, 5% is Rs 5 lakh. As marketing hype escalates the price by 10-20%, the speculator offloads the apartment. If the sale price works out to Rs 6,000 a sq ft, the investor pockets a cool Rs 20 lakh on an investment of Rs 5 lakh.

“In fact, property usually changes hands four to five times before it actually comes to the end-user. By introducing such a provision, the government will deal a blow to the speculator market and check inflation in the bargain.

Further, it will also enable the government to know how many times a particular property has changed hands,” says Sandeep Donald Shah, director, Taylor Devices.

Tuesday, June 26, 2007

Smaller realtors take exit route

Its judgement day for the small time builders and it looks like the brunt of the fiasco will be felt by the consumers who have booked apartments with these crooks.

Economic times reports

MUMBAI: Liquidity crunch in the real estate market is driving many small-time developers to look around for a cover. Many want to liquidate their land or incomplete projects by selling them to larger developers or private equity players even on reduced valuations. What is forcing them to take this drastic step is the stagnant market, where property rates are showing signs of a major correction, said industry sources.

“I am sitting on, at least, five-six such proposals. Some deals are at an advanced stage. The small-time developers are mainly offering land that they had acquired earlier,” Pradeep Jain, chairman of Parsvnath Developers, told ET.

An official with Mumbai-based realty developer Runwal Group said it had received similar proposals, mainly from markets like Pune, Nagpur and Bangalore. “Though we have not concluded any such deal so far, there are, at least, a couple of proposals we are working on,” he said.

“Small developers are under pressure now. Fund flow into this sector has begun to dry up. Selling incomplete projects to big developers or private equity firms is an option explored by many such developers,” said Pranay Vakil, chairman of KnightFrank India, a frontline property consultant. He added that in the past two months, home sales have come down by over 70%.

“A sharp fall in sales would force them to cut the price in the coming months. The trend is visible in many suburban markets,” Mr Vakil said.

Industry observers said the residential property market, which remained stagnant for the past few months, has started developing cracks, especially in Mumbai’s suburban markets and the tier-II and III cities. The volume of sales has dropped by 70-80% in the past two months in the wake of rising interest rates and additional pressure on household budgets.

Besides, there is pressure on real estate developers due to the tightening of fund-raising norms. The recent moves by the Reserve Bank of India (RBI) and the finance ministry have left them with a few choices like private equity and public offering for their fund needs.

While RBI has been imposing increased restrictions on banks on their exposure to real estate sector, the finance ministry has been trying to curb unrestricted flow of foreign funds.

In May this year, the finance ministry had said that all foreign funds raised by Indian companies, through the issue of partially convertible, non-convertible and optionally convertible preference shares, would be treated as debt and would be subject to guidelines applicable for external commercial borrowings (ECBs).

This move has made it tough for developers to access foreign funds, since ECBs are allowed only in large real estate projects and the conditions are far more stringent than FDI. Several real estate funds admitted that they are working on a clutch of projects now, much more than what they used to around two-three months ago.

“The quantum of deals has seen a manifold increase over last three months. We feel it is mainly due to the tight fund raising norms introduced in the sector,” said Ritish Vohra, director, investments, Saffron Asset Advisory.
According to Mr Vohra, the developers are seeking private equity funds even for small-sized projects. “The valuations are also more realistic now,” he said.

Property consultants said in Navi Mumbai, one of the largest residential markets, prices have fallen sharply. “The enquiry level have come down to almost nil last month. Developers are now slashing around Rs 1,500 per sq ft in the property prices,” said PM Raju, a Navi Mambai-based property dealer.

Tax raids on Bangalore real estate developers

I believe this is the tip of the iceberg. There are probably thousand other developers defrauding the government and the end-users by using black money to jack up land prices and then get end-users to pay for it using white money financed through loans. This is a local hawala operation to say the least.

Times reports.
BANGALORE: Tax sleuths on Tuesday unearthed cash estimated to be in billions of rupees, gold and jewellery and incriminating documents in raids on the offices and residences of some Bangalore-based real estate developers and property dealers, a top official said.

The searches were carried out simultaneously in four to five premises of the developers and dealers in the presence of police and senior officials of the income tax department.

"The raids are still on. Details on recoveries are awaited, as the teams are yet to return from the field. The searches are being conducted in connection with tax evasion and amassing of wealth disproportionate to their sources of income," the income tax official told IANS on phone.

Police officials accompanying the tax sleuths said raids in the premises of S. Manjunath, a leading builder-cum-property dealer, yielded about Rs.100 million in cash, seven kg of gold, documents and stamp papers related to buying and selling of lands, residential plots and houses.

Official-cum-residential premises of two other developers - Reddy Veeranna and Kupendra Reddy - were also searched leading to the seizure of unaccounted cash, forged documents and passbooks of bank accounts.

"The seizures have revealed the extent of evasion and non-disclosure of the deals taking place in and around the city, where demand for commercial and residential properties has been surging of late," the official said on condition of anonymity.

Meanwhile, Karanataka Chief Minister H.D. Kumaraswamy denied reports that realtor Manjunath was associated with his family and handled property deals on his behalf.

"So many people have began claiming to be close to me and my family since I became the chief minister last year. It is for the authorities to verify such claims," Kumaraswamy told reporters at the secretariat when the raids were brought to his notice.

Sources in the ruling Janata Dal-Secular said Manjunath was only a supporter of the party and participated in its campaign during the last elections.

Monday, June 25, 2007

NRI's land's target of mafia in Delhi

The "land mafia" in the national capital seems to be turning its attention to non-resident Indians (NRIs) whose absence is usually long enough to grab their land and sell it illegally at whopping prices.

Four cases of unauthorised occupation of land, known in New Delhi as land grabbing, that Delhi Police are investigating show how well-off NRIs, mostly settled in the US and Britain, are falling easy prey to such gangs.

Police officials say the land mafia - mostly a bunch of unscrupulous real estate agents - form a well-organised network to keep a close watch on the lands and properties of those NRIs who hardly visit the city.

"The land mafia has formed a complex web including government and bank officials to keep a tab on people who rarely visit their properties back home," a senior Crime Branch official said.

The mafia not only sells such land with forged documents but also puts NRIs in trouble by obtaining bank loans against their property.

Statistics available with police show that at least 14 cases of grabbing and selling of land owned by NRIs - mostly in upmarket areas of south Delhi - have been registered in the past three years.

Explaining the modus operandi, an official said the culprits keep in touch with the contacts of NRIs in order to know about their visits and the duration of their stay in Delhi. They also study the status of their properties.

"Through these contacts, the mafia finds the person in whose name the initial conveyance deed - a legal document signed and delivered to effect a transfer of property and to show the legal right to possess it - has been executed by the NRI or the caretaker of the property here. After that the person is lured by the mafia with hefty amounts."

In most cases, the person is a property dealer who resides only a little distance away from the property. This person is first lured into the mafia loop, say police.

"As the original conveyance deed doesn't bear the photograph of the actual owner or NRI, the newcomer in the mafia group executes a general power of attorney (GPA) in favour of a property dealer of the mafia. They also spend hefty amounts in paying stamp duty," the official told IANS.

After completing the paper work, the mafia creates confidence in a prospective buyer, showing him the rosy picture that this particular property is available for a throwaway price. Sometimes the buyer is told that the owner needs money for his medical expenses or foreign trips.

Another modus operandi the mafia adopts is showing the prospective buyer a fake agreement and the receipt of a hefty amount as proof that the property has been sold off.

"Through such means they receive a hefty amount from a prospective buyer. If things become apparent to the buyer, they threaten him with dire consequences and while returning his money ask him to compromise on a much lesser amount," said another senior police official.

"It has also been noticed that such properties are mortgaged with banks for big loans."

"Banks are also sluggish in getting a case registered, as they report the matter after a gap of more than four or five years. Such attitude on the part of bank officials adversely affects the prospects of a case and apprehending the accused persons," the official added.

Sunday, June 24, 2007

Nandagudi SEZ causes land prices to zoom

Times had an article on the speculative nature of land prices in Nandagudi. The sellers are making hay while the sun shines. More power to the farmers. Now the land-sharks have moved so better watch out before buying anything here.

Nandagudi: One announcement, and the dusty swathes of Nandagudi village, 45 km from Bangalore, have turned into fields of gold. The Karnataka government’s proposal to set up a special economic zone (SEZ) has ensured that per acre of land, which was being sold for a paltry Rs 1 lakh just a few months ago, reach the dizzying Rs 1-crore figure. Also joining the party in the boom is Hoskote, a neighbouring biggish town.
Land prices have appreciated 200% in two months and show no signs of slowing down. Land sharks are already on the spot. Adjacent to the SEZ area, the land used to cost less than Rs 2 lakh. Today, it is nothing less than Rs 60 lakh. Move further down towards the NH 4 near Hoskote, and it goes up to Rs 1 crore per acre.
Why not? Nandagudi hobli serves as the centre-point for the international airport in Devanahalli, new Outer Ring Road and, of course, the SEZ. Already, 50% of the land around the proposed SEZ area has been bought by local leaders, real estate firms and land dealers from Karnataka, Maharashtra and Andhra Pradesh. Remaining lands are either under sale-purchase process or being held by original owners, who are waiting for the prices to go up further.
“Many farmers have sold their lands and settled down in neighbouring Chintamani or Kolar. We are making hay while the sun is shining,” said Nandagudi resident Satyanarayana gleefully. The village, where bullock carts used to trundle, is being dusted up by quite a few pricey SUVs, he says.
A nondescript village till last year, Nandagudi caught the shine of real estate developers when the BMRDA proposed to set up an IT township in Hoskote, between D Shettarahalli and Nandagudi hobli.
The proposal is still pending before the government, but that has not stopped land sharks from creating the hype and pumping up the prices. They have already acquired large swathes of land and are waiting to make a killing. Nandagudi’s USP: Silk ’n’ milk
Nandagudi: Situated 45 km from Bangalore in Hoskote taluk, Nandagudi hobli has been involved in silkwormrearing (sericulture) from the 1780s and the village got involved in milk production only later.
“Tipu Sultan introduced sericulture in Hoskote during the early 1780s, along with Chennapatna and Ramanagaram. Since then, the silk traders from this village competed with Chennapatna’s traders and met a major part of the demand from Mysore state,’’ explains Arun Prasad, research head, Discover Bengaluru.
Even today, most of the villagers are engaged in sericulture. This in turn, provides employment to many others. Dairy products prepared in Nandagudi and its vicinity meet the demand of parts of Bangalore, Chintamani and Kolar. A small village near Nandagudi — Idigenehalli — contributes about 2,750 litres of milk every day. Of late, even vegetables are being grown in the area.
Eminent historian Suryanath Kamath cites records dating back to 1530 AD from Voddarahalli, which reveal that Nandagudi was the headquarters of an administrative unit (sthala) called Nandaguli. In another record from the same period, Nandagudi is referred to as ‘Nanjiguli’ under Sugatur Seeme. Tamil records mention the place as Nondukolli.
“Earlier, under the Cholas, it was called Kaivaranadu. Under the Hoysalas, Nandagudi became the headquarters of Naadu,’’ Kamath said.
Many monuments and temples in Nandagudi still narrate tales from the pages of history. The village is situated at the foot of a laterite hillock and a small cave there houses a renovated Mutyalamma temple — the village goddess. The temple pillars have many relief sculptures carved in the Vijayanagara style.